The Western Downs Battery project, Queensland’s largest battery storage build and one of Australia’s biggest battery projects has secured five virtual battery contracts with renewable-focused energy retailers. Located 22 kilometers southeast of Chinchilla in Queensland’s Western Downs region, this $889 million landmark construction project is reshaping Australia’s energy storage landscape.
Backed by developer Neoen Australia, the 845 MW / 2,300 MWh battery sits adjacent to a 460 MWp solar farm. Together, they form the Western Downs Green Power Hub. The latest contracts signed with SmartestEnergy and Nectr bring the project’s total number of virtual retail agreements to five, adding significantly to existing deals with AGL Energy, Shell Energy, and ENGIE.
Western Downs Battery Project Gains Two New Virtual Battery Contracts
Neoen Australia has signed two new virtual battery agreements with energy retailers Nectr and SmartestEnergy. Both are renewable-focused companies operating in Australia’s National Electricity Market (NEM). Nectr is the retail brand of Hong Kong-listed HK Electric’s Australian operations. SmartestEnergy is a UK-headquartered energy management and trading company active in the Australian market.
Furthermore, both arrangements complement existing renewable energy offtakes that each retailer already holds. Neoen frames the new contracts as providing price certainty and energy supply reliability alongside the retailers’ generation portfolios. Consequently, the deals deepen the project’s role as a platform for innovative virtual battery contracting in Australia.
Under the new agreements, Western Downs Battery Stages 2 and 3 will deliver up to 2-hour and 4-hour capacity services respectively to Nectr. Stage 3 will additionally provide 4-hour capacity services to SmartestEnergy, for 50 MW and 200 MWh. These virtual battery agreements allow retailers to hedge customer load. They do so by virtually charging and discharging the battery using bespoke software developed in-house by Neoen — without building or operating a physical battery themselves.
Stage 3 Construction of the Western Downs Battery Project Advances on Schedule
Stage 3 of the Western Downs Battery project is currently under construction and progressing well. Neoen has issued notices to proceed to Tesla and construction contractor UGL, a member of the CIMIC Group, marking the formal start of Stage 3. UGL is preparing the site for the installation of 312 Tesla Megapack 2XL units before the end of 2026.
Additionally, UGL is installing high-voltage infrastructure, control and switchroom facilities, earthworks, and footings. The contractor will also provide testing and commissioning support. Stage 3 will add 305 MW and 1,220 MWh of four-hour duration storage, taking the facility’s total combined capacity to 845 MW and 2.3 GWh. Operations are expected to commence during the Australian summer of 2027/28.
Stages 1 and 2 are already operating in the NEM, delivering grid reliability, frequency control, and firming services. Notably, Stage 2 was completed six weeks ahead of schedule in September 2025. Both operating stages use grid-forming inverters. These reduce Queensland’s reliance on coal and gas generators and provide critical grid stability. Meanwhile, the project connects to Powerlink’s Western Downs substation through existing grid infrastructure. This leverages the hub’s established transmission link and avoids the need for new high-voltage line construction for Stage 3.
Western Downs Battery Virtual Battery Contracts Reshape Queensland’s Energy Market
The Western Downs Battery virtual battery contracts are establishing a new model for grid firming in Queensland. Through these agreements, retailers gain financial exposure to the battery’s stored energy without taking on construction or operational risk.
Neoen developed the virtual battery concept in-house and has refined it across multiple retail partnerships. Thus far, the project has contracted with five major energy market participants: AGL Energy, Shell Energy, ENGIE, Nectr, and SmartestEnergy.
This approach offers retailers price certainty and supply reliability. It complements their existing renewable generation portfolios. Furthermore, it allows customers to manage the intermittency of renewable energy and respond to shifting customer demand.
As a result, the Western Downs Battery is emerging not only as critical grid infrastructure but also as a commercial platform for Australia’s energy transition. With Stage 3 set to be operational by summer 2027/28, the project is set to play an even bigger role in Queensland’s target of achieving 80% renewables by 2035.
Australia’s battery storage construction boom extends well beyond Western Downs. Queensland is also home to the Bulli Creek Solar-Battery Project, a $2.5 billion development that recently redesigned its first stage to pair a 300MW solar facility with a 425MW/1,700MWh battery system. Together, both projects signal a decisive shift in how developers approach utility-scale renewable construction across the state.
Also read: Western Downs Green Power Hub Solar Project in Queensland, Australia
Project Fact Sheet
Project name: Western Downs Battery (part of Western Downs Green Power Hub)
Location: 22 km southeast of Chinchilla, Western Downs Region, Queensland, Australia — on Barunggam country
Developer/Owner: Neoen Australia
Total capacity (on completion): 845 MW / 2,300 MWh (2.3 GWh)
Project value: Approx. AUD 1.4 billion (~USD $889 million) — as part of a broader Neoen Australia loan package covering Western Downs and Collie batteries
1st Stage: 270 MW / 540 MWh — operational since June 2025
2nd Stage: 270 MW / 540 MWh — completed September 2025 (six weeks ahead of schedule)
3rd Stage: 305 MW / 1,220 MWh — currently under construction; expected operational summer 2027/28
Storage duration: Stage 1 & 2: 2-hour storage; Stage 3: 4-hour storage
Technology: Tesla Megapack 2XL units (312 units for Stage 3)
Inverter type: Grid-forming inverters (all stages)
Grid connection: Powerlink’s Western Downs substation via dedicated 275 kV high-voltage line
Co-located asset: 460 MWp Western Downs Solar Farm (over one million solar panels; 400 MW AC output)
Grid services provided: Frequency control, grid firming, synthetic inertia, transmission network support
Retail contracts (virtual battery):
- AGL Energy (200 MW / 400 MWh, 10-year)
- Shell Energy, ENGIE (two contracts: 25 MW/50 MWh and 50 MW/200 MWh)
- Nectr (2-hour and 4-hour)
- SmartestEnergy (50 MW/200 MWh, 4-hour)
ARENA support: Received funding through ARENA’s Large Scale Battery Storage Funding Round for grid-forming inverter technology
Significance: Largest battery storage asset with grid-forming capabilities in Queensland’s electricity network; part of Neoen’s 2 GW+ Australian battery portfolio
Project Team
Developer & Project Owner: Neoen Australia
Battery Storage Supplier: Tesla
Balance of Plant & Construction Contractor: UGL (a member of CIMIC Group)
Transmission Network Operator: Powerlink Queensland
Grid Regulator: Australian Energy Market Operator (AEMO)
Independent Reviewer (historical): Aurecon
Government Funding Body: ARENA (Australian Renewable Energy Agency)
Solar Farm Builder (co-located asset): Sterling & Wilson
CleanCo Queensland: State government-owned renewable energy operator holding an agreement to purchase 80% of the solar farm’s capacity
Energy Retailers (virtual battery contract holders):
- AGL Energy
- Shell Energy
- ENGIE Australia
- Nectr (HK Electric’s Australian retail brand)
- SmartestEnergy (UK-headquartered, active in Australian market)
Local Government: Western Downs Regional Council
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